Panama's Boom Helps Drive Nicaragua Canal Dreams

Panama's boom helps drive Nicaragua's dreams of building a new trans-ocean canal

"I don't think we're going to be just like Panama, because they're already 100 years ahead of us. But yes, I think this is going to help Nicaragua put poverty behind it and generate jobs," said Roberto Pasquier, an electric appliance salesman in a market in the Nicaraguan capital, Managua.

Panama's prosperity has drawn tens of thousands of job-seekers, mostly from Nicaragua and nearby Colombia, Venezuela and the Dominican Republic. Almost 40,000 such workers have been granted legal status in Panama since 2010 under a government program meant to feed the roaring demand for labor to build projects that include Central America's first subway, a $1.452 billion investment.

Panama has the highest level of human development in Central America according to the United Nations Development Program, which measures factors including life expectancy, health care access and education.

"You can make money here in Panama, buddy," said Mauricio Hernandez, a 29-year-old Colombian who sells food in the streets of Panama City. "We're all coming for dollars."

Panamanian Abel Aparicio, a 49-year-old hotel chef, earns $1,000 a month, twice what he made when he started 20 years ago, and has bought two small apartments that he rents out to supplement his income.

"Nobody's that worried about losing their job," he said. "If you leave one job, other opportunities open up, and there are ways to make money besides hotels, which there are a lot of these days," he said.

Panama's economy started booming around the time that authorities began the Panama Canal expansion in 2007. By 2010, the annual growth rate rose to around 10 percent, where it's stayed.

The canal expansion generated 30,000 direct jobs and the administration of populist right-leaning President Ricardo Martinelli estimates that the government will have put $16 billion into public works between 2009 and 2014. That amount was $4.4 billion between 2000 and 2004. A 13.5 percent unemployment rate in 2004 dropped to 4.6 percent in 2012, in a workforce of 1.6 million. The poverty rate dropped from 36 percent in 2002 to 26 percent today.